Aragen Life Sciences IPO

Strengths · 7

• 01Revenue from operations grew from Rs 1,657.58 crore in FY2024 to Rs 1,845.11 crore in FY2025 and Rs 2,178.39 crore in FY2026, a year-on-year growth of 18.06% in FY2026.
• 02Profit for the year rose from Rs 160.10 crore in FY2024 to Rs 180.38 crore in FY2025 and Rs 257.64 crore in FY2026, and PAT margin improved to 11.83% from 9.78%.
• 03Adjusted EBITDA margin was 27.26% in FY2026 against 25.60% in FY2025, and ROCE rose to 18.18% from 14.66%.
• 04The company served 591 customers in FY2026 across the United States, Europe, Japan, India and other APAC markets.
• 05Net cash flow from operating activities was positive in all three years: Rs 388.57 crore in FY2024, Rs 335.71 crore in FY2025 and Rs 375.86 crore in FY2026.
• 06Total borrowings fell from Rs 645.47 crore in FY2024 to Rs 447.30 crore in FY2026, and net worth rose to Rs 2,308.31 crore.
• 07The company has 3,412 scientific personnel, and 14.04% of them hold a PhD.

Risks · 10

• 01The CRO business gave 64.51% of revenue from operations in FY2026, so the company depends on drug companies continuing to outsource research.
• 02North America gave 54.80% and Europe gave 29.67% of revenue from operations in FY2026, so any problem in these markets hits demand.
• 03The top five customers gave 33.27% of revenue in FY2026 against 24.23% in FY2025 and 19.69% in FY2024. The top ten gave 43.29%.
• 04Material margin slipped from 76.35% in FY2024 to 72.91% in FY2026.
• 05Net working capital days rose from 64 in FY2024 to 71 in FY2026.
• 06Return on net worth was 11.75% in FY2026, and ROE was 11.96%.
• 07There are 39 tax proceedings and 4 statutory or regulatory proceedings against the company, with an aggregate amount of Rs 431.90 crore. Subsidiaries face 15 tax proceedings and 1 material civil case.
• 08The offer includes an offer for sale of 2,73,29,192 shares by promoters and investors, and that money does not reach the company.
• 09General corporate purposes are not yet fixed, and the cap on that spend is 25% of gross proceeds.
• 10The top ten suppliers gave 32.91% of total purchases in FY2026 against 27.56% in FY2024.

Aragen Life Sciences Limited is a fully integrated contract research, development and manufacturing organisation, called a CRDMO. It works with global innovator companies and emerging firms in the life sciences industry across the drug development lifecycle. Its services cover contract discovery and pre-clinical research (CRO) and contract development and manufacturing (CDMO) for both small molecules and biologics.

The company served 591 customers in FY2026. Its customers include Big Pharma, large and mid-sized pharmaceutical companies and small biotechnology firms. They work in pharmaceuticals, biotechnology, animal health, agrochemicals and specialty chemicals. The company reports one business segment, which is contract research, development and manufacturing services.

Revenue comes mostly from outside India. North America gave 54.80% of revenue from operations in FY2026 and Europe gave 29.67%. India gave 5.22% and the rest of the world gave 10.31%. The CRO business gave 64.51% of revenue from operations in FY2026.

Aragen runs R&D and manufacturing at six facilities. Five are in India and one is in the United States. It had 3,412 scientific personnel at the end of FY2026, and 14.04% of them hold a PhD. The company is promoted by Davinder Singh Brar, Reddy Investment Trust, Madhubani Investments Private Limited, Aparna Reddy Gunapati and Keshav Gunupati Venkat Reddy. Davinder Singh Brar is the Chairman and earlier served as chief executive officer and managing director of Ranbaxy Laboratories Limited.

The company plans to ramp up its biologics CDMO business and its small molecule CDMO business. It also plans to keep expanding its CRO capabilities. Part of the fresh issue money is meant for new equipment at Hyderabad and a biologics facility in Bengaluru.

The industry

The industry report by F&S says the global CRDMO market is projected to grow from USD 167 billion in 2025 to USD 251 billion by 2030F, at a CAGR of 8.41%. India recorded a CAGR of 13.35% between 2020 and 2025 in this market. The Indian CRDMO market is projected to grow at a CAGR of 13.42% between 2025 and 2030F and reach about USD 15 billion by 2030F. The report links this to pharma companies outsourcing more work to integrated providers and diversifying their supply chains.

Customer concentration: Top 5 customers gave 33.27% of FY2026 revenue (24.23% in FY2025). Top 10 customers gave 43.29%.